A bank's profitability has an effect on its safety and soundness. Earnings can be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Obviously, banks that are losing money have less ability to do those things.
On Bankrate's earnings test, The Peoples National Bank of Checotah scored 16 out of a possible 30, beating out the national average of 15.12.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one important way to measure a bank's earnings. The most recent annualized quarterly return on equity for The Peoples National Bank of Checotah was 7.25 percent, below the national average of 8.10 percent.
For the twelve months ended December 31, 2017, the bank recorded net income of $1.6 million on total equity of $22.4 million. The bank experienced an annualized return on average assets, or ROA, of 1.18 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.00 percent.